OTC Advanced:

Free Agency AfterMath: Receivers

The chart below compares the Expected Contract Value with the stated contract value for each contract of $10 million or more signed during the 2016 offseason. Expected Contract Value 1.1 is applied at the time of signing. Expected Contract Value 1.1 takes into account the nature and timing of contract amounts, the resulting relationship between dead money and APY in each year of the contract, the length of the contract, and the position and age of the player. Expected Contract Value 1.1 is therefore a performance-neutral measurement of expected contract earnings. As a result, the primary way a player can exceed or fall short of his Expected Contract Value is to perform better or worse than the performance expectations implied by his contract.

Player

Team

Stated Contract Value

Length

Expected Contract Value

% Expected to be Earned

Zach Ertz

PHI

$43,638,527

6

$30,464,960

70%

Marvin Jones

DET

$40,000,000

5

$29,833,381

75%

Travis Kelce

KC

$47,646,000

6

$29,658,696

62%

Coby Fleener

NO

$36,000,000

5

$23,654,189

66%

Mohamed Sanu

ATL

$32,500,000

5

$22,158,545

68%

Dwayne Allen

IND

$29,400,000

4

$21,554,796

73%

Travis Benjamin

SD

$24,000,000

4

$18,144,151

76%

Lardarius Green

PIT

$20,000,000

4

$14,061,804

70%

Chris Hogan

NE

$12,000,000

3

$9,893,801

82%

Jermaine Kearse

SEA

$13,500,000

3

$9,791,158

73%

Rishard Matthews

TEN

$15,000,000

3

$9,531,236

64%

Brent Celek

PHI

$12,000,000

3

$7,850,340

65%

Mike Wallace

BAL

$11,500,000

2

$6,910,411

60%

Antonio Gates

SD

$11,000,000

2

$6,436,992

59%

Total

$348,184,527

$239,944,460

69%

Coby Fleener and Dwayne Allen present a natural point of comparison, given that they play the same position and previously played for the same team. While Fleener’s Expected Contract Value is approximately $2.1 million more than Allen’s, approximately $1.6 million of this Expected Contract Value is attributable to the 2020 season. Allen’s Expected Contract Value is therefore approximately $500K less than Fleener’s from 2016-2019, but Allen returns to free agency one year sooner than Fleener. The best way to think about this is to say that if we assume Fleener and Allen were equal players, Allen paid $500K worth of Expected Contract Value during 2016-2019 in order to have an opportunity to make more than $1.6 million in 2020. If Allen is at all productive in 2019 (which is far from certain), he will certainly be able to accomplish that objective in 2020. So from this perspective, Allen seems to be in a better position than Fleener, despite Fleener’s larger stated contract value, superior amount of full guarantees and the general perception that he is a superior player to Allen.

I understand the desire for players such as Zach Ertz and Travis Kelce to sign extensions as soon as they are eligible. Not only do they face a high degree of risk in playing out the 2016 season on low base salaries, but the upside of doing so is capped due to the possibility of having their respective teams apply the franchise tag the following season. However, I find it somewhat odd that extensions of this nature almost always involve a large number of contract seasons. Ertz and Kelce have not only foregone 2017 free agency – they have subjected themselves to team options in 2018, 2019 and 2020. The players presumably received either more guaranteed money or a higher APY in exchange for agreeing to these team option years, but I am not specifically aware of whether this was thought through in precisely this way.

From the player’s perspective, I think the objective in these situations should be to limit the extension to two seasons (i.e. extension through 2018 for Ertz or Kelce). Such a contract would acknowledge the possibility that the team could apply the franchise tag in 2017 and grant one team option year on top of that, while at the same time mitigating risk for the player in 2016 and allowing for a return to free agency in 2019 while the player is still young enough to be highly sought after. Such an extension should specify that the team would not be permitted to apply the franchise tag in 2019. Relative to the extensions these players actually did sign, they would receive either less guaranteed money or less total/annual money in order to account for the loss of value to the team attributable to the team options in 2019 and 2020. But for young players, the upside of returning to free agency during prime years seems to be worth it.

Along similar lines, both Mohamed Sanu and Travis Benjamin received two fully guaranteed contract seasons ($14 million in the case of Sanu, $13 million in the case of Benjamin), followed by multiple team options (three in the case of Sanu, two in the case of Benjamin). If either player had instead requested a contract of only two contract seasons in length, but still fully guaranteed for those two contract seasons, the teams would presumably have responded by requiring the amounts to be less due to the removal of the team options beyond 2017. The interesting question is how much less the teams would be willing to offer for these two contract seasons. Query as to whether this scenario came up during contract negotiations.

The question is more obvious in the case of Marvin Jones due to the fact that he only received one fully guaranteed contract season in the amount of $13 million. The Lions would almost certainly not have agreed to sign him to a one-year contract worth $13 million. The team paid extra in the first year (and did not count the entire amount against the cap due to the usage of a signing bonus) in order to obtain team options in 2017, 2018, 2019 and 2020. The question for Jones is how much less a team would have paid him on a one-year contract in 2016, and whether the difference between that amount and $13 million was worth surrendering upside above $7 million from 2017-2020

Bryce Johnston earned his Juris Doctor from Georgetown University Law Center in May 2014, and currently works as a corporate M&A associate in the New York City office of an AmLaw 50 law firm. Before becoming a contributor to overthecap.com, Bryce operated eaglescap.com for 10 NFL offseasons, appearing multiple times on 610 WIP Sports Radio in Philadelphia as an NFL salary cap expert. Bryce can be contacted via e-mail at bryce.l.johnston@gmail.com or via Twitter @NFLCapAnalytics.

Nick Barton is a junior at the McDonough School Business at Georgetown University. He is majoring in Finance and Operations and Information Management. Nick currently interns with an NFL team . His prior work experience includes interning with CollegeSplits and Dynamic Sports Solutions, and working as a research assistant for the Center of Applied Research of the Apostolate.